Allow New Property Creation via Fundraiser to be canceled; allow reductions in the amount invested

[marv-engine]

There are several possible reasons why a user might want to cancel a New Property Creation via Fundraiser, including insufficient funds are raised, an unforeseen change in circumstances or valuation. Canceling a fundraiser protects both the creator and the investors.

Based upon the current tx 50 message definition, the fundraiser should be cancelable until the Deadline has passed. When it's canceled, all invested funds will be released back to each investor and the tokens purchased will be destroyed. I realize this requires us to keep the restriction that funds and tokens are locked until after the Deadline has passed. We could provide a way for a Smart Property creator to specify that the fundraiser is not cancelable, eliminating the lock on funds raised and tokens issued.

This begs the question - should an investor be able to reduce the amount of his investment (to zero, possibly) before the Deadline expires? Again, unforeseen changes could drive an investor to want to do that. He can increase his investment with additional Investment Sends. We'd want some mechanism, e.g. a penalty fee, to discourage malicious reductions in investment amounts.

[dacoinminster]

Too complicated, IMHO. If somebody wants to cancel their fundraiser, they
can manually return the money once the time period is past.

I don't ever expect to allow an issuer to destroy coins in somebody else's
possession for any reason whatsoever.

On Mon, Mar 24, 2014 at 12:06 PM, Marv Schneider
notifications@github.comwrote:

There are several possible reasons why a user might want to cancel a New
Property Creation via Fundraiser, including insufficient funds are raised,
an unforeseen change in circumstances or valuation. Canceling a fundraiser
protects both the creator and the investors.

Based upon the current tx 50 message definition, the fundraiser should be
cancelable until the Deadline has passed. When it's canceled, all invested
funds will be released back to each investor and the tokens purchased will
be destroyed. I realize this requires us to keep the restriction that funds
and tokens are locked until after the Deadline has passed. We could provide
a way for a Smart Property creator to specify that the fundraiser is not
cancelable, eliminating the lock on funds raised and tokens issued.

This begs the question - should an investor be able to reduce the amount
of his investment (to zero, possibly) before the Deadline expires? Again,
unforeseen changes could drive an investor to want to do that. He can
increase his investment with additional Investment Sends. We'd want some
mechanism, e.g. a penalty fee, to discourage malicious reductions in
investment amounts.

Reply to this email directly or view it on GitHubhttps://github.com//issues/93
.

[marv-engine]

Manually returning money from a fundraiser to one investor at a time can be tedious and prohibitively expensive - if there are hundreds or thousands of investors (if that's the word we're using). It can easily become unworkable for a user.

Also, if the fundraiser has completed, investors may have resold the tokens. Should the user send refunds to the original investors only? This leads to the question about how would the user notify the investors that the Simple Send they receive out of the blue is a refund for the fundraiser? It's nice to get money for no apparent reason, but it's hard to keep a set of books that way.

What is the complexity in doing a cancelation, especially if the funds and tokens are locked until the Deadline passes?

[zynis]

I agree with JR, too complex at least for now.

Also keep in mind that many contracts have penalty clauses for breaking contracts, and so if we were to go down this path we can spend months trying to incorporate different types of penalty clauses into the protocol. Of course one case, the simplest, is that there is no penalty for reneg'ing on a contract, but I think this is all better defined in the contract via the issuance web link.

[zynis]

Actually I just realized this is similar to a contract being callable or having a buy back option: for example being able to call back a dividend type security or bond.

[ripper234]

This may be interesting in the sense of allowing the token issuer to buy it
at a certain price.
However definitely not for now.

We may want to start creating branches on the spec repository, to separate
what's relevant now, from future improvements.

The master branch should only hold things we are supporting right now.

Ron Gross
Executive Director, Mastercoin Foundation
mastercoin.org | ripper234.com | ripper234 on skype (Inbox non
Zero http://ripper234.com/p/how-i-learned-to-let-go-of-inbox-zero/)
Schedule my time at meetme.so/RonGross

On Tue, Mar 25, 2014 at 8:55 PM, Dominik notifications@github.com wrote:

Actually I just realized this is similar to a contract being callable or
having a buy back options: for example being able to call back a dividend
type security or bond.

—
Reply to this email directly or view it on GitHubhttps://github.com//issues/93#issuecomment-38605673
.

[dacoinminster]

Final note: we did end up adding fundraiser cancellation to our spec, and it is implemented.